Comments on: Would you trust your money to this man?

By: Do I need The Money Guy’s help? You tell me …- 7million7years

Do I need The Money Guy’s help? You tell me …- 7million7years — Thu, 26 Nov 2009 08:48:35 +0000

[...] few days ago, in a discussion about the merits (or otherwise) of financial advisors, I made an admission: I’m having a hard time finding advisors and mentors who can move me to [...]

By: Adrian

Adrian — Sat, 21 Nov 2009 00:46:17 +0000

@ Rick – I agree; we are talking advice here … the last time I handed over $1 mill to somebody to manage for me, he lost $600k in a few weeks

By: Rick Francis

Rick Francis — Fri, 20 Nov 2009 14:37:13 +0000

@Neil

I would seek advice rather than delegating control over the investment account. Even if you are very busy a MM301 portfolio should not require much management at all- say monthly withdrawals and rebalancing each quarter.

-Rick Francis

By: Neil

Neil — Thu, 19 Nov 2009 18:18:36 +0000

@Rick
> Adrian, any country club members you could ask?

> If a professional has been in business for at least a decade they should have enough of a record to judge their abilities. How they handled 2008 would be very telling.

Like Madoff? Didn’t he get recommended all the time on the country club circuit?

Unless there is real transparency and good auditing (not just reporting, I can fake that), there is always a risk unless you exclusively control the access your money.

Back before we were married (and during the dot-com collapse), my wife had a problem where a broker did a number of unauthorized trades just to fill his pocket. I will say that once it was discovered the brokerage firm stepped in, gave him the boot, refunded her money and “made it right”.

And what do you do if you are so focused on earning money that you don’t have time to manage it? If you have the trust can you outsource it?

By: Rick Francis

Rick Francis — Thu, 19 Nov 2009 06:23:46 +0000

WJ,

I’m not kidding- If Adrian is looking for an advisor to protect his gains with minimal risk then he needs an advisor that thinks that way. I don’t think he would or should turn over control of his money- but he should consider paying for investing strategies.

Becoming independently wealthy using a MM301 process is just too SLOW. If you want someone with a lot of experience managing a really large sum of their own money in a MM301 way you should look for old money. But do they manage it themselves, or do they hire a professional manager?

Adrian, any country club members you could ask?

If a professional has been in business for at least a decade they should have enough of a record to judge their abilities. How they handled 2008 would be very telling.

-Rick Francis

By: Adrian

Adrian — Thu, 19 Nov 2009 05:27:51 +0000

@ WJ – I can’t be sure on the real-estate, my Aussie house is only worth $5 million (no mortgage) … but I can tell you that my US house is bigger/better/newer and ‘only’ cost $1.6 million (although, we’d be struggling to get much more than $1 – $1.2 million today.

I might throw your and Rick’s opposing views re The Money Guy to our readers on Sunday, and see what advice they can give me.

By: wj

wj — Thu, 19 Nov 2009 02:08:47 +0000

Rick, you gotta be kidding.
Asking Adrian who have made $7million himself to send his money to someone who have not made that much money from his supposed expertise?

The only way that advisor is getting rich is from the management fees he’s getting from those clients of his.

My philosophy is simple. If I want to get rich thru properties, I will want to look for someone who have done it thru properties. So, in order for me to trust the advice of the financial advisor, he must show me that he has already achieve financial independence thru investing(not thru giving advice). That is totally different.

By: wj

wj — Thu, 19 Nov 2009 02:02:36 +0000

Oh that house is in Melbourne and owned by an Ex-CEO of Dunlop Pacifc

http://www.businessday.com.au/executive-style/luxury/melbournes-20m-mansion-20091119-inlm.html

By: wj

wj — Thu, 19 Nov 2009 02:00:52 +0000

Adrian,
What is your number and date?

I would think it is easy for you to double your money again in 7 years (ie, $7mil to $14mil in 7yrs or less).

Are you looking at $35mil in 7yrs?

By the way, is house prices getting out of whack? A mansion bought for $2mil in 1991 is getting sold for $20mil in 2009. A 10 fold return in 20yrs! Did the rich got richer by 10 fold thru this crisis or is the flood of liquidity inflating every asset prices out there? In that case, should we just concentrate on properties?

By: Walter Pfaeffle

Walter Pfaeffle — Thu, 19 Nov 2009 00:50:49 +0000

Dear Sir,
back in May of 2005, the prosecution charged that the $5 million Mr. Vilar and his partner were accused of having stolen from an investor named Lily Cates was only the ‘the tip of the iceberg’ of a massive fraud, and that ‘hundreds of millions’ may be missing. More than four years later, monies owed investors amount to approximately $20 million against more than $40 million in various JPMorgan (former Bear Stearns) accounts frozen by the government when the defendants’ company, Amerindo Investment Advisors, was shut down. Recently the government brought in another alleged victim who they say was defrauded of $20 million, but this victim, a bank entity, refuses victim status, the government concedes in its most recent motion. A year ago a jury found both defendants guilty of the most serious charges after a seven-week trial. The way the evidence was presented, the jury had no choice. It all comes down to strategy: The government argued successfully that the defendants were guilty because they ‘intended’ to steal. This was never proven in court. They asked the judge to sentence Mr Vilar to more than 20 years behind bars, which would amount to a life sentence for a man of his age (69). The defense lawyers, who did not even bring in their own witnesses, called for acquittal, arguing that there were no losses because the ‘victims earned millions more than they invested with Amerindo. A different strategy may well have created a doubt in the jurors’ minds and the outcome may have been quite different (see recent insider trading acquittal). Following the jury’s verdict, the court felt Mr Vilar was a flight risk and sent him to prison where he is today awaiting sentencing. No date has been set. Looking at all the other recent schemes where investors really took a beating (Madoff, Marc Dreyer, etc), one wonders why the government was hell-bent on taking this case out of civil court were repaymemt schedules were successfully being worked out. My French professor praised the American system of law, but he compared it to the Ritz Hotel: You can stay there if you have ther money.